VANCOUVER, British Columbia (Reuters) - North America's first
comprehensive carbon tax is now in effect in the Canadian West Coast
province of British Columbia, greeted with complaints that some
gasoline stations have used the tax as cover to raise prices more than
necessary.

The already-controversial tax, which took effect on Tuesday, added
2.34 Canadian cents per liter to the pump price, but some stations
pushed up prices more than 4 cents, the Vancouver Sun reported on
Wednesday.

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British Columbia officials were not available for comment on the
increases that pushed the price at some service stations to more than
C$1.50 a liter, some of highest prices in Canada.

The tax, which is the first comprehensive carbon use-based tax in
North America, places a fee of C$10 per ton of carbon emissions on all
fossil fuels. That will increase C$5 per ton a year for the next four
years.

Supporters say the tax will encourage people to use energy more
efficiently and is needed for British Columbia to meet its goal of
reducing greenhouse gas emissions linked to global warming by 33
percent by 2020.

The government says the tax's goal is environmental not
revenue-raising. It has been offset by cuts in income taxes, and
residents last month received a C$100 rebate that officials hoped would
put into energy-saving uses.

Critics have derided the fee as a "tax grab" that will hurt the
economy and the poor, and say that recent increases in gasoline prices
are already forcing people to reduce their energy consumption.

While drivers saw the immediate impact of the tax on Tuesday, the
Canada Day holiday, other consumers will soon see it in their utility
bills or bills for transportation and other services.

A spokeswoman for Terasen Gas said higher natural gas prices have
encouraged customers to use the fuel more efficiently in recent years,
but she said the utility did not have data on the likely impact of the
carbon tax on demand.

Because the tax is based on carbon content, the utility hoped it
might prompt drivers to switch from using gasoline or diesel to
alternative fuels such natural gas for their vehicles.